in Hong Kong were probably promoted independently by the

C.P.G. there, in an opportunist desire to make the most

of genuine labour unrest

(b) Mainland China had to react to the situation, and

chose to give support to the C.P.G. in Hong Kong.

3. The unknown factor in the present crisis is how

far mainland China has now decided to go in bringing

pressure on IMG, and how far there are different views

there on future policy.

4. The possible interpretations of the Chinese course

on the assumption

of action, that she is now controlling events, appear

to be these:-

L

(i) China has decided to try to force us to

If

accept a Macao position in Hong Kong,

this is so, she will continue to escalate

Hong Kong disturbances to the point when,

in order to remain in Hong Kong, we must

capitulate to whatever demands are made, and,

in effect, accept Chinese domination of Hong Kong.

(11) China has decided to sacrifice the economic

benefits she derives from Hong Kong to Cultural

Revolution "purity" of doctrine, and to drive us out

qf Hong Kong completely,

(iii)

China has made no basic policy decision, but is

trying to achieve some propaganda victory as the

price for calling-off the disturbances. Such

a propaganda gain could relate to the presence

of American ships and troops from Vietnam on

leave in Hong Kong; or to labour reforms;

to the release from prosecution or

of the

21

or

imprisonment

charged with or sentenced

5.

6.

for their role in the riots,

Our aim must continue to be that of restoring order

and peace in Hong Kong. We have so far acted with both firmness and
restraint. But the police are now tired, and

it is clear that if disturbances continue we shall have to use troops.
This in itself may provoke Chinese escalation, both both in Hong Kong
itself and in mainland China.

We must
therefore consider HMG's interests very carefully indeed.

Qu

A

I convinced that a Macao solution would be unacceptable. It would be
damaging to our international prestige (at a

we face a hamber of problems).

Crucis

4

very

time when Gibraltar and Adep are presenting-several problems) It would
be intolerable for, the Governor, and impossible in

/terms

H

ידיד rחt-

7.

B

terms

A

affan's of my responsibility for Hong Kong in Parliament, This being so,
it follows that if China is embarking upon course (i), our resistance to
it will

compel her to resort to (ii) or (iii). If she has decided, or later
decides upon (ii), an alternatives

would be to resist which could would mean war

to withdraw.

or

Withdrawal would represent an unpleasant recognition

of the realities of the situation. I am very much

concerned that if this proves inevitable, our decision to withdraw
should be so made and so implemented as to

preserve as much of our dignity as is possible. To

scuttle out hastily under intensive Chinese pressure

would be intolerable.

I therefore propose to inform.

my colleagues if my information should lead me to the belief that
withdrawal is likely to be inevitable, and I am in the meantime
preparing contingency plans

for withdrawal, in consultation with the Secretary of

State for Defence.

9. If, however, we are facer win

Course (li), I must ask my

to consider one o

Colleague to

more the following possibilities Open to us.

(a) We could proceed vicposonsty

and effectively to carry one lasoin reformis.. I have been engaged in
dócussion with the Hong Kong Government Krough The Goreiner, aboni.
Theme

in any

But there

case;

has been á considerable Amount of resistance pour The "employers
represent alwes on the Executive Counci

In early Mary (?) I insisted.

on land

аска

on

eary achai particular aspect. The

one

employers are at present very anxious asamitié qemeral Situation

commimediarely

and we

Comedy Cams Inrough extensive.

Cany And long-overdue labomi reforms (outlined in Annex B), I woved like
to do this; But the taboon reform

is labour

Aptar, earth It woner be welcome! by the average Worker in Hong Kong and
woned give us

à bener

A

moral position but it woner be unlikely to satisty, China:

·Nevertheless of the Chinese decision were to Mayap. Mas seek a lowering
of the temperature, she might.

&

well clami a

4 we do

viday. In shove

what is certainty

right we may gave que China a face-Saving Pormnia at the cost of her
claim to a propaganda gain

(by we comes withdraw

Consent

in

to American leave

visits to HK in the

1

Knowledge that her troops.

Corned wake

стече

use kai

they do ar present of Bangkok. And Manila. As The effect of this would
be gradual. as it became realised thei no further visits were taking
place. (At the moment, we

have cancelled Thure (?) inipending nails) which wit abonent take place)
Qui in die

the Chinese toned.

Com se

слалий

a significans

propaganda gani

ANRA because of thei Concern with Russian attitudes, the's woned

winous donor be meaningful to them manner.

We comer make concessions in relation to changes, and sentences already
passes upon those who participared in the nits. The Chinese.

прог

that we

pumili

conneme

Annart

shoven

ou

are the

them

aporigin

to the "vistime

Chemi

сотр

an

110.

"

"demands" included Thi's wome's now bein

accord win the legal and Come procedures in HK

and I

it.

مه

не

not recommend

I therefore ask my colleagues to endorse the general. Conclusions
reached in

6,7 and

sara!! 8 and to decide:

Whelner

showed to

Mamão pursue either (a) or (b) above

а вый

ין

146

1.

SECRET

HONG KONG

Outline of Paper for OPD

We have always known that Hong Kong was vulnerable.

But it is valuable to China and we had assumed that it was

Indeed there

in her interests to maintain the status quo. has been evidence in the
past that the Central Government

have controlled and restrained the Communists in the territory.

2.

The scene has now changed. Arising out of labour troubles

a major campaign has been amounted in Hong Kong itself linked with
hostile demonstrations in Shanghai and Peking and with

the expulsion of our representative in Shanghai. A loosening of

control by mainland China of the Communists in Hong Kong has

resulted from recent developments in the Cultural Revolution. The first
mass demonstrations in Hong Kong were probably promoted

independently by the Communists there, in an opportunist desire

to make the most of genuine labour unrest. Mainland China had

to react to the situation, and chose to give support to the C.P.G.j

in Hong Kong.

3. The unknown factor in the present crisis is how far mainland

China has now decided to go in bringing pressure on HMG, and

how far there are different views there on future policy.

4. The possible interpretations of the Chinese course of action,
assuming

that she is now controlling events, appear to be these:

change

(i) China has made no basic policy decision, but is trying

to achieve some propaganda victory as the price for

calling-off the disturbances. Such a propaganda gain could relate to the
presence of American ships and troops from

Vietnam on leave in Hong Kong; or to labour reforms;

to the release from prosecution or imprisonment of the

persons charged with or sentenced for their role in the

riots.

or

PAGO

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/ (ii)

SECRET

5.

(ii)

China has decided to try to force us to accept

a Macao position in Hong Kong. If this is so, she will continue to
escalate Hong Kong disturbances to the point when, in order to remain in
Hong Kong, we must capitulate to whatever demands are made, and, in
effect,

accept Chinese domination of Hong Kong.

(iii) China has decided to sacrifice the economic

benefits she derives from Hong Kong to Cultural

Revolution "purity" of doctrine, and to drive us out

of Hong Kong completely.

We cannot resist a determined attempt to force us out

altogether and we could not tolerate the humiliation of

remaining in Hong Kong without effective control. But there

is no need to assume the worst and our immediate responsibility

is to maintain law and order, retain morale and confidence so

that the economy can continue to flourish. Firm action is

required to do this but, at the same time we should avoid,

as far as possible, action which could be regarded by the

C.P.G. as provocative. We should avoid doing anything to

"escalate the confrontation" to the extent that we get

involved in a situation from which there is no escape except by abject
surrender or a futile attempt to fight it out,

leading to the same result, Our steps, therefore, must be

directed to the needs of the local security situation while

taking the wider implications into account, and they need

to be carefully measured and timed.

SECRET

16.

SECRET

6. Recommendations

(i) Local Security

(a) We are already sending the Commando Carrier

BULWARK to Hong Kong where she should arrive by

the end of this week.

(b) The governor has already been authorised to

neutralise several of the buildings from which

the campaign is being directed,

(c) The Governor has now asked for authority to pick

up and, if possible, deport (or failing that,

detain) a selection of up to 24 known leaders of

the present campaign. The disruption of the

leadership would be a distinct and positive gain

and would be seen by the majority of the population

as firm action. On the other hand it is unlikely that

the Chinese Government would accept these leaders as

deportees and, if they were detained in Hong Kong,

this would provide Peking and the local Communists

with a grievance. The Governor has undertaken not

to use this weapon lightly or unnecessarily and, on

balance, I recommend that he should be given the

authority to go ahead if the situation requires it.

(d) Action against the principal Communist newspaper

which is the official C.P.G. organ in Hong Kong.

The Governor accepts that prosecutions for sedition

or inciting the police to disaffection might have

duotina dangerous
repercussions, and is proposing to seek

emergency powers to close down the printing press,

h but/would only take action after consulting me on

each individual case. I would propose to give him

a general authority on this understanding.

/(ii)

SECRET

|

1

(ii) Labour

Relations between employees and employers in Hong Kong have not been
good and we should do our

best to improve matters.

Less than 12% of the total working force are declared members of
trade unions

and there are 100,000 members of the Communist

Unions as opposed to 70,000 others.

The Communist

Unions are basically disinterested in genuine industrial issues. I
recommend that we should press the Governor to go ahead vigorously with
improvements

in the labour legislation including early steps to

shorten the hours of work of women and young persons.

(iii) Other Matters

(a) Facilities to the U.S.

In the background of our difficulties with

the C.P.G. lies their irritation at the

facilities which the U.S. forces in Vietnam

enjoy in Hong Kong. We have latterly restricted

number visits of warships to the same as last year and

more recently have suggested that larger ships

should not come. I do not recommend any further !

immediate action since any significant

diminution would be claimed by the Chinese as

a propaganda victory. But I am sure that this

is something that we should keep under review

in the longer term.

(b) Military Planning

I suggest that contingency planning should

be set in hand with regard to the implications

of:-

(i) a prolonged confrontation with Communist

China;

ii) withdrawal7.

SECRET

St.S.

NOTHING TO BE WRITTEN IN THIS MARGIN

97499

C

Registry No.

Top Secret. Secret. Confidential. Restricted. Unclassified.

DRAFT

O.P.D. PAPER

Type 1 +

To:-

From

Telephone No. & EIL

Department

Memorandum by the Commonwealth Secretary

Situation in Hong Kong

A background note on the recent

disturbances ie at annex.

2.

The policy of the Hong Kong Government

has been to deal firmly with any disorders

which the Communists may try to instigate

but at the same time to avoid so. far as

possible action which could be regarded by

the Chinese Peoples Government as

unnecessarily provocative.

3. One encouraging feature is that many

public organisations have rallied behind

the Government's attempts to maintain peace. in

Hong Kong. But there are already signe

that unless the Hong Kong Government are seen

to take effective action to. control the

situation, instead of simply acting to block

individual Communist initiatives, public

confidence will slip. Once this occurs a

landslide could quickly follow.

4. The key to the situation is the

maintenance of public confidence and especiall

police morale, The police have stood up to

the situation very well but:-

(a) fatigue is now beginning to tell on

them; and

(b) the constant barrage of Communist

propaganda

gand

5.

propaganda, directed specifically to

the submission and intimidation of the

rank and file, could begin to take

effect if allowed to continue unchecked.

The Governor has been given authority

to neutralize several of the buildings from

which the campaign is being directed by

declaring 24 hour curfews in the areas round

the building, or by declaring closed areas

around them. This will, initially, disrupt their

communications and seriously hamper their

control of operations. If they move to other

premises it would be easier for the Hong

Kong Government to keep them under closer

surveillance,

6.

The Commando Carrier "Bulwark" has been

ordered to Hong Kong and should arrive on the

May. Her presence will strengthen public

and police morale.

7.

The Governor has also recommended

(1) picking up and if possible deporting

(and failing that detaining) a

selection (e.g. up to 24) of the known

leaders of the present campaign;

and

(ii) action against the principal Communist

newspaper "Wen Wel Po", the official

C.P.G. organ in Hong Kong, for either sedition or inciting the police to

disaffection.

8.

The disruption of the leadership would

be a distinct and positive gain, at least in

the

NOTHING TO BE WRITTEN IN THIS MARGIN

SECRET

the short term. It would be seen by the majority of

On the other hand the population as firm
action.

it is unlikely that the Chinese Government would accept

these leaders as deportees and they would have to be

detained in Hong Kong. This would provide Peking

and the local Communists with a standing grievance and

a further "demand".

9.

The newspaper "Wen Kei Po" is in flagrant breach

of the law and if its activities continue to be

ignored it may well be taken as a sign of weakness.

There are nine other Communist newspapers in Hong

Kong which could continue the campaign unless

similar action were taken against them. Action

against these newspapers would certainly be regarded

by Peking as provocation.

10. Labour Relati ons. The Communist dominated

trade unions are basically disinterested in genuine

industrial issues, except in so far as they can

exploit them for political ends.

Indeed, their

demand is not for more Government involvment in

labour relations but precisely the contrary the

-

Government should stay out of labour disputes and

leave them to be settled by direct "struggle"

between management and labour on cultural revolutionary

lines. Less than 12% of the total working force

of about 1.5m. are declared members of trade unions

(100,000 favouring the Communist F.T.U., 40,000 the

right-wing T.U.C. and 30,000 neutrals) and paid-up

membership are smaller (9% of the labour force).

11.

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SECRET

:

11.

Hours of work for women and young children.

There is a split between the employers and workers'

representatives on this issue, but the recent events

are likely to have put the employers in a more

receptive frame £ of mind. The Governor has

suggested that a possible method of reducing the hours

of work would be by legislation to empoĝer the

Commissioner of Labour (by regulation):-

(i) to introduce at once a 48 hour week for

individual industries where this is not

already the universal practice;

(ii) to introduce at once in industries where the

48 hour week is the common but not the

universal practice, a 48 hour week with

permissive overtime, about 12 hours per week

for individual factories;

(iii) to work out a phased programme for the

12.

reduction of the standard working week for all

other industries, with the object of bringing

them all ultimately to 48 hours.

The Governor also considers that now is the

moment to announce that the Hong Kong Government, with

the advice and assistance of H.M.G., intends to proceed

with a review and Expanнtix expansion of its labour

legislation, on which considerable preliminary work has already been
done (there are about 30 pieces of legislation at various xxx stages of
preparation).

He would welcome expert assistance from H.M.G. in

carrying out this review and considers that an expert

SECRET

would

SECRET

1.

would need to be lent to the Hong Kong Government

for a period of between 6-12 months. He has asked

for the services of Miss S.A. Ogilvie (Assistant

Labour Adviser, Ministry of Overseas Development)

for this purpose.

13.

Available information suggests that the

disturbances of 6 May and later were not instigated

from China but occurred partly because control over

pro-Communist organisations in Hong Kong fron

The

China had slackened and local leaders had taken the

initiative in acting in a militant fashion which

they believed to be in keeping with the present

atmosphere within China. Since the tk 15 May, however,

Peking has supported the Hong Kong pro-Communist Chinese "demands" and
after large scale demonstrations

in Peking and the xak sacking of the office in

Shanghai have closed down the Shanghai Office.

Russians (Moscow telegram 848 of 20 May) have also

begun to taunt Peking about the Chinese lack of

interest in undermining the colonial regime in Hong

Kong, trade with which yielded more than half China's

foreign currency earnings. The Chinese may

themselves also hope that by putting pressure on Hong

Kong they can prevent it being used by American

warships and leave personnel.

14. The dilemma we face is that determined and firm

action against the pro-Communist leaders and newspapers

in Hong Kong is essential if we are to retain control

over

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SECRET

over the situation in Hong Kong. But such action

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